Retrospective validation of sales tax notification upheld where State competence extended to validating actual sales tax liability.

Retrospective validating legislation can sustain an impugned sales tax notification where the validating Act expressly includes the notification and, read with its text and context, shows legislative intent to treat the relevant taxing provision as operative from the stated date. A State Legislature competent to levy sales tax under Entry 54 of List II may enact such retrospective validation unless the Constitution bars it; the seller's inability to pass on the tax and any inconsistency with collection machinery do not defeat competence. The validating Act and notification were upheld, and liability for the tax demand remained.

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Issues: (i) Whether the validating Act, on its true construction, validated the impugned sales tax notification; (ii) whether the validating Act was within the legislative competence of the State Legislature under entry 54 of List II.

Issue (i): Whether the validating Act, on its true construction, validated the impugned sales tax notification

Analysis: The validating enactment stated its object in the preamble and expressly included the impugned notification in the Schedule. The words in section 3, read in context and with the Hindi text, qualified the reference to the sections and not the notifications. The legislative intent was to treat the relevant section as having operated from 31 March 1956 so that the notification issued on that date could be sustained.

Conclusion: The notification was validly validated by the Act.

Issue (ii): Whether the validating Act was within the legislative competence of the State Legislature under entry 54 of List II

Analysis: The power to enact a law with respect to tax on the sale of goods includes the power to legislate retrospectively, unless the Constitution imposes a restriction. A sales tax is not rendered non-taxation merely because it is imposed after the sales took place or because the seller may not be able to pass it on. The impugned Act operated on actual sales of goods and merely validated the levy retrospectively; the supposed inconsistency with collection machinery in the Sales Tax Act did not affect legislative competence.

Conclusion: The validating Act was intra vires the State Legislature.

Final Conclusion: The validating statute and the impugned notification were upheld, so the petitioner remained liable to the tax demanded for the relevant period.

Ratio Decidendi: A legislature competent to tax sales of goods may enact retrospective validating legislation for actual sales, and such competence is not defeated by the seller's inability to pass the tax on or by procedural collection provisions in the parent statute.

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